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The economics of low stabilisation: Implications for technological change and policy

: Knopf, B.; Edenhofer, O.; Held, A.; Jochem, E.; Schade, W.

Hulme, M.:
Making climate change work for us : European perspectives on adaptation and mitigation strategies
Cambridge: Cambridge University Press, 2010
ISBN: 978-0-521-11941-2
ISBN: 0-521-11941-3
Book Article
Fraunhofer ISI ()

The European Union (EU) is committed to the goal of keeping the increase in global temperatures from pre-industrial levels to no more than 2°C with a better than even chance. Achieving this 2° target would require stabilising greenhouse gas concentrations at less than 450ppm. This chapter examines whether and how this can be done by probing the technological and economic feasibility of reaching such a low level of stabilisation with acceptable means. We explore both aspects for three carbon dioxide equivalent concentration levels, set at 550, 450 and 400 parts per million (ppm) carbon dioxide equivalents, which have different probabilities of reaching the 2°C target. To investigate the robustness of results on mitigation costs and technological options, we compare findings from different state-of-the-art-energy-environment-economy models for the time horizon 2000-2100. An in-depth sectoral analysis of how the transformation of the energy system could proceed in Europe follows this global analysis. Our results suggest that low stabilisation is feasible in terms of technologies and moderate in costs. A broad range of technologies can be used to achieve stabilisation targets such as 550ppm that have only a low likelihood of reaching the 2°C goal. Much more ambitious reduction targets, such as 400pm, however, rely heavily on the availability of carbon capture and storage (CCS) in combination with biomass as options for removing carbon from the atmosphere and on the expansion of renewable energy. This target alone has a high likelihood of reaching the 2°C goal. Overall, global mitigation costs, expresses as cumulative gross domestic product (GDP) losses until 2100 relative to the baseline, are found to be below 0.8 per cent for the 550 ppm target, but nearly 2.5 per cent for the most ambitious of the three stabilisation targets, 400 ppm. These costs could be twice as high if biomass availability was smaller than first assumed or if the CCS storage potential was more limited. One model reports GDP gains for all stabilisation pathways as it incorporates existing inefficiencies. A detailed analysis of the transformation of the energy systems in Europe leads to the conclusion that improving energy productivity and substituting renewable energy for fossil fuels are the most important means for achieving the 2°C goal.